Why Was Your COE for a VA Home Loan Denied?

The COE is an official document issued by the U.S. Department of Veterans Affairs (VA) that confirms you meet the basic service and discharge criteria for a VA-backed mortgage. Although most veterans who meet eligibility requirements obtain their VA Certificate of Eligibility without difficulty, there are a few reasons why some applications get rejected.

In some cases, the denial occurs because of insufficient service time, an ineligible discharge status, or even small paperwork mistakes. According to VA data, a large percentage of veterans use VA loans—data from 2025 shows around 43% of veterans opting for VA financing.

While denials might be rare, they can still happen. Fortunately, most issues are fixable, especially when you understand the specific reason for the denial and follow the right steps to correct it.

Common Reasons Your COE Gets Denied

To help you identify and fix a COE denial, let’s break down the most common reasons. Understanding these factors can give you a clear path toward correcting issues and moving forward with your home purchase.

Reason 1: Insufficient Service Time

The VA has minimum active-duty service requirements. For example, you generally need at least 90 days of active service during wartime or 181 days during peacetime. For those who enlisted after 1980, the requirement can be up to 24 months of continuous active duty. Members of the National Guard or Reserves often need six years of service to qualify if they haven’t been on active duty long enough.

Sometimes a veteran who served slightly less than the required period gets denied. However, there are situations where combined service—for instance, active duty plus National Guard time—can help you meet eligibility requirements. If you haven’t met the minimum threshold, you may need to continue serving until you do.

Reason 2: Dishonorable Discharge

The VA typically requires an honorable or general discharge for loan eligibility. A dishonorable or bad conduct discharge usually disqualifies you from VA benefits, including the COE. While this situation might seem hopeless, some veterans pursue discharge upgrades or character of service determinations, although successful appeals can be challenging and time-consuming.

Reason 3: Paperwork Errors or Missing Records

Mistakes on your DD-214 (the document that outlines the details of your military service), missing dates, or typos can lead to a COE denial. This can happen if your documents show fewer months of service than you actually served or if your discharge status is incorrectly recorded.

Fortunately, these issues are often resolved by contacting the National Archives or your branch of service’s records department to correct the mistakes. Once the corrected documentation is resubmitted, many veterans receive an updated COE in just a few weeks.

Reason 4: Prior VA Loan Default

If you previously defaulted on a VA-backed loan, you might owe money to the VA, which can block you from receiving a new COE. In such cases, the VA keeps track of the loss they incurred on your default. To regain eligibility, you usually need to repay or settle that debt. For instance, if you defaulted on a $250,000 VA loan and the VA suffered a $50,000 loss, repaying that amount (or reaching a settlement) can lead to the restoration of your full loan entitlement.

Reason 5: Active Duty Without Enough Time Served

Active-duty military members need to meet the same minimum thresholds—often 90 days of service if you’re currently deployed in a conflict zone—before a COE can be issued. If you’re still on active duty and haven’t reached the required number of days, you might face a temporary denial. However, once you pass the threshold, you can reapply and likely receive approval.

How to Fix a Denied COE

Receiving a COE denial can be frustrating, but in many cases, you can take specific actions to turn things around. Below is a step-by-step approach to help you fix a denied COE and move closer to purchasing your ideal home.

1. Get the Denial Reason:

   Your denial letter or email from the VA or your lender should provide a clear explanation. Perhaps you were short a few days of service, or your discharge status was recorded incorrectly. Identifying the exact reason is the first step in resolving the issue.

2. Gather Your Records:

   Once you know why your COE was denied, collect the necessary documents to fix it. Common documents include your DD-214, National Guard or Reserve Point Statement, or any updated records showing additional service time. If there are typos or missing data, contact the National Archives or your service branch’s administrative department.

3. Appeal to the VA:

   If you believe you do meet the qualifications but were denied, you can file an appeal with the VA. Sometimes, providing extra evidence (like records of Reserve service) can push your service time over the required threshold. If discharge status is the issue, you’ll need to follow the VA’s process for a discharge upgrade or apply for a character of service determination.

4. Clear Prior Defaults:

   If your denial is due to an unpaid debt from a past VA loan default, you may need to repay or settle that debt to restore your entitlement. This step can be more time-consuming and financially challenging, but regaining the COE can save you thousands in mortgage-related costs in the long run.

5. Reapply with Proof:

   After making corrections or settling any debts, submit a new COE request through the VA’s eBenefits portal or directly with your lender. This final step usually moves quickly if all issues have been resolved—many veterans receive their updated COE within a couple of weeks.

What If You Can’t Fix the Denial?

In some cases, you may find it’s impossible or impractical to correct the COE denial. This situation can occur if your discharge was dishonorable and you’ve exhausted all appeals, or if you’re unable to repay a large default. While this can be disappointing, there are alternatives to securing a home loan without a COE:

• Conventional Loan:

  If you opt for a conventional mortgage, you’ll typically need a larger down payment (often around 20% of the home’s purchase price) and possibly face higher interest rates. For instance, on a $300,000 home, a 20% down payment is $60,000. Monthly mortgage payments may also be higher than with a VA loan, but it’s a viable path to homeownership for many who no longer qualify for VA benefits. Conventional vs. VA Loans.

• FHA Loan:

  An FHA loan requires as little as 3.5% down, which is significantly less than a conventional loan’s 20%. On a $300,000 home, this means a down payment of around $10,500. However, you’ll pay mortgage insurance premiums (MIP), which can add $100 or more to your monthly payment. FHA Loans vs. VA Loans

• Paying Cash:

  This is rare but possible for veterans who have enough savings or proceeds from a retirement fund, inheritance, or investments. While paying cash means no monthly mortgage bill, it can deplete your financial reserves.

Even with these alternatives, you’ll miss out on key VA loan benefits such as no PMI and competitive interest rates. If your COE denial is permanent, carefully compare the long-term costs of different loan types or consider delaying your purchase until you can address any underlying issues.

Real Stories of Denied COEs

Sometimes, the best way to see that a denial is not the end of your journey is by learning about veterans who overcame similar setbacks:

• Service Time Victory:

  One Army Reservist served 80 days on active duty overseas. He was initially denied because he didn’t meet the 90-day wartime requirement. By combining his Reserve time, he successfully appealed and received a valid COE, eventually buying a home valued at around $350,000.

• Clearing a Default:

  A Marine veteran had defaulted on a previous VA loan, owing about $50,000. Over several years, he managed to pay off the debt. After completing payment, he applied again, had his COE restored, and secured a new mortgage for a $300,000 home.

• Fixing Paperwork Errors:

  A retired Air Force service member discovered a discrepancy on her DD-214 that incorrectly listed her total time served. After working with the National Archives to correct the record, she resubmitted her documents, received a valid COE within a month, and purchased a house priced at $280,000.

• Discharge Status Appeal:

  An ex-Navy veteran faced a bad conduct discharge. She tried to appeal this status but was ultimately denied. Since her COE couldn’t be restored, she opted for an FHA loan for $310,000 and successfully moved into her new home. Although she missed out on VA benefits, she still became a homeowner.

Why It’s Worth Fighting a Denied COE

VA loans offer significant savings for veterans: no down payment requirement, no monthly PMI, and often lower interest rates compared to conventional mortgages. By fixing issues that caused your COE denial, you could save hundreds of dollars each month.

For example, a VA loan at 5.5% interest on a $300,000 mortgage might result in monthly payments of around $1,200 (excluding taxes and insurance), whereas a conventional loan at 7% could cost you closer to $1,660 per month. This difference adds up over the life of your mortgage, making the extra effort to fix a COE denial well worth it. Current VA data suggests that about 95% of VA loans close successfully, indicating that most veterans can overcome hurdles and secure financing.

If you need more personalized guidance, consider reaching out to your state’s Veterans Affairs office or reputable veteran service organizations. You can also visit the official VA eligibility webpage.

to learn more about the rules, discharge requirements, and how to handle a denied COE.

FAQs About Denied COE for VA Home Loan

1. Why was my COE denied?

   In most cases, you may have fallen short on minimum service days, had a discharge status that doesn’t meet VA guidelines, encountered a paperwork error, or have a past VA loan default.

2. Can I appeal a denied COE?

   Yes. You can submit additional documentation, correct errors in your military records, or provide proof of extra service time. If discharge status is the problem, you may pursue a discharge upgrade or a character of service determination.

3. How long does it take to fix a denied COE?

   It varies. Simple paperwork corrections may take a couple of weeks, whereas appeals involving discharge status or major debts can take a few months. Generally, expect 15 to 60 days.

4. What if my discharge is dishonorable?

   Dishonorable or bad conduct discharges typically disqualify you from VA benefits. While you can attempt to appeal or upgrade your discharge, approvals are rare. If appeals fail, you may need to look into FHA or conventional loans.

5. Can I get a VA loan after a default?

   Yes, if you repay or settle the amount the VA lost on your previous loan. Once you clear the debt, you can restore your full entitlement and apply for another VA loan.

6. What documents can fix a denied COE due to paperwork errors?

   An accurately updated DD-214 or service record from the National Archives is often enough to correct dates or discharge status. Once those records are officially changed, you can resubmit your application.

7. Is active-duty service ever denied a COE?

   Yes, if you haven’t yet served the minimum required number of days. Once you hit the threshold (90+ days for most war-time situations), you can reapply and likely be approved.

8. What if I can’t fix my COE denial?

   If a permanent reason prevents you from qualifying, consider FHA or conventional mortgages. Both options allow you to become a homeowner, though they often come with higher monthly costs and down payments.

The Bottom Line

Discovering you’ve been denied a COE for a VA home loan can feel like a major setback, but it doesn’t have to end your homeownership journey. By identifying the specific reason for denial—whether it’s insufficient service time, a discharge issue, paperwork errors, or a previous VA loan default—you can often address the problem and successfully reapply.

For many veterans, the benefits are too valuable to pass up, from the zero-down payment option to the no monthly PMI on VA loans. Even if fixing a denial requires extra steps, the potential savings on interest and mortgage insurance can make a significant difference to your financial well-being over the life of your loan.

If you’re stuck, don’t hesitate to reach out to veteran-focused organizations, your local VA office, or even specialized lenders who understand the unique challenges of military service members. With persistence, the right documentation, and a clear plan, you can overcome a COE denial and move forward with confidence toward the home you deserve.